Content by Keyword: Long-Term Care Insurance

The CLASS Program benefit trigger requires that an individual must be unable to perform at least the minimum number (which may be 2 or 3) of activities of daily living as are required under the plan for the provision of benefits without substantial assistance (as defined by the Secretary) from another individual .

The discussion in this report has focused on the need for and use of long-term services and supports by older people with cognitive impairment and people with dementia. As noted at the beginning of the report, some, and perhaps many, adults of all ages who have cognitive impairment due to diseases and conditions, such as mental retardation, other

Older people with cognitive impairment and people with dementia are high users of residential long-term care services. In 2009, 47 percent of all nursing home residents had a diagnosis of dementia in their nursing home record (American Health Care Association, 2009), and 68 percent had some degree of cognitive impairment (USDHHS, 2010).

Far more research has been conducted on the relationship of cognitive impairment and inability to perform ADLs than on the relationship of cognitive impairment and the need for supervision to protect an individual from threats to health and safety, at least as these relationships exist in older people and people with dementia.

In older people, cognitive impairment of sufficient severity to result in inability to perform ADLs and other self-care activities is most often caused by dementia. The term, dementia , refers to a syndrome of decline in memory and at least one other cognitive ability that is severe enough to interfere with social or occupational functioning (A

As noted above, the CLASS Program legislation includes two specified benefit triggers and one unspecified benefit trigger to be determined by the Secretary. Box 1 shows the language from the CLASS Program legislation that describes the benefit triggers. Four concepts (underlined in the box) are particularly important in considering the implication

Results of the Long-Term Care Underwriting Survey for the Individual Market in 2009. LifePlans, Inc. Waltham, MA November, 2010.
Note that in roughly 8% of the cases individuals are still declined based solely on information found in the application alone. This suggests that agent pre-screening is not always effective.

Information from this analysis has clearly demonstrated that individuals who are unable to purchase private LTC insurance due to the medical underwriting process tend to be somewhat older, male and less likely to be employed than the total applicant pool. While few exhibit outward signs of functional impairment or dementia, this is likely the resu

While the CLASS Program is structured in a manner that maximizes participation -- even among those who already may have functional dependencies -- the one requirement that does afford some level of control regarding enrollment is the work requirement. To enroll in the program, an individual must be employed. Therefore, if one wants to obtain a pro

In explaining to applicants why they may have been declined from insurance, almost all companies point to the presence of specific medical diagnoses. This is the case even when such diagnoses may not have yet manifested themselves into functional or cognitive decline. It is enough for an underwriter to know that such diagnoses will likely lead to

Table 2 summarizes additional socio-demographic characteristics of individuals who were declined from purchasing LTC insurance compared to individuals who were issued policies. As shown, compared to new buyers, declined individuals tend to be somewhat older, more male, and much less likely to be employed. Regarding employment, the results suggest

In 2009, underwriting rejection rates across the industry were at 19.4%. As shown in Figure 2 below, declination rates are highly sensitive to age. This data is based on a recently completed survey of 21 LTC insurance companies representing the vast majority of sales in 2009. For applicants under age 45, declination rates are below 10% whereas for

There are a variety of ways that companies approach the underwriting process. The specific strategy can reflect attitudes toward risk selection, competitive positioning, sales and marketing, and pricing philosophy. Regardless of the specific approach used by companies, the overall purpose of underwriting is to assure that individuals purchasing in

To accomplish these goals, we contacted major private LTC insurance companies currently selling in the market to solicit their participation in the study. We asked them to provide us with data on the total number of individuals that had applied for insurance between January 1, 2009 and June 30th, 2010 and had not been accepted into the risk pool d

Currently, there is no aggregate industry-wide knowledge about the population of individuals who have applied for LTC insurance but not been able to purchase policies due to health status. Thus, the study makes an important contribution to the knowledge base. Second, obtaining a profile of these individuals would provide important insight into lik

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